In response to the Covid-19 outbreak and the Russian/Ukrainian war, President Akufo Addo has criticised international rating agencies for rashly and unfairly downgrading sovereign states, including Ghana.
He claims that action had a detrimental effect on their economy.
In a speech to honour the Africa Export and Import Bank, the president said that some African economies have been downgraded to the point where they are no longer able to access the international capital market, which had previously assisted them in raising money to support their liquidity needs.
One of the most challenging periods in the nation’s post-independence history, according to President Akufo Addo, was the tough period in the economy, which was exacerbated by the downgrades.
I am able to make this claim with confidence and conviction because I am the AU’s champion for African financial institutions and the head of a nation that has recently experienced one of its most trying post-independence periods. These difficulties were made worse by the rating agencies’ careless behaviour, which involved pro-cyclical downgrades that effectively cut off Ghana from capital markets and turned its liquidity crisis into a solvency crisis.
“The country that had grown to be the favourite child of bondholders, and had successfully entered the market at the height of the pre-Covid downturn,” he said, “was suddenly shut out of international capital markets.”
However, he commended Afrieximbank for its prompt assistance, which helped the nation overcome several difficulties.
“When suddenly we realised we were alone, Afrieximbank under its counter-cyclical response mechanism provided timely support to help Ghana navigate the macroeconomic management challenges made worse by Russia’s war of aggression in Ukraine in an orderly manner.”
Since the majority of international banks are leaving the continent, Professor Benedict Oramah, President of the Afrieximbank, has pledged of continued attempts to broaden banking access to many residents.
In order to facilitate commerce across the continent, he also highlighted a few instances of innovative items that were successfully implemented.
Ken Ofori Atta, the minister of finance, took use of the opportunity to urge the bank to move quickly to help several African nations overcome their current problems.
He thought the bank might be one of the cornerstones that will change the continent.